Prior art high-speed check processing systems are reliable but the processing performed by such systems is labor-intensive and requires a rapid, repetitive movement of checks. This processing often causes reading errors, paper jams, and check rejects.
Newer check processing systems employ imaging to capture digital images of the checks. Once these digital images have been captured, a bank may send each of its customers monthly statements with images of the customer's cashed checks instead of the checks themselves. Such image processing allows the checks to be "truncated" prior to shipment to the customer, reducing in-house check processing costs.
The cost of processing checks is high because:
1. Encoding the amount of the check on the bottom of the check in magnetic ink character recognition (MICR) code is expensive. This encoding is performed manually by an operator observing the amount written on the check and encoding this amount in MICR code. Such encoding is required so that batches of checks can be read automatically by a check sorter and balanced. That is, the amount total of all checks fed into the sorter must be known and must remain the same as the checks are sorted by bank number and/or customer account number.
2. Each bank must sort its own checks ("on-us" checks) in account number sequence so that the checks can be returned to the bank's customers in connection with monthly statements provided to the customers. This sorting process requires several iterations and is time-consuming and expensive.
3. Mailing processed checks back to the account holders is expensive.
4. Modifying conventional check sorters by adding the capability to perform image processing can cost a bank from one to several million dollars.
Typically, there are two classes of documents processed by check sorting equipment, including (1) over-the-counter items, and (2) in-clearing items.
Over-the-counter items are items such as checks, deposit slips, and the like, arising from transactions conducted at the processing bank itself or at its branches. These items are "proved," encoded in batches, and then sorted by a sorter. The sorting process typically includes data capture and the sorting of documents by passing the documents through the sorter a variable number of times, depending on different sorting criteria and on the particular sorting algorithm employed by the sorter. Typically, with over-the-counter items, the first pass through the sorter is used to separate "on-us" documents from "transit" documents. The on-us documents are those documents drawn on the processing bank whereas the transit documents are those documents drawn on other banks.
The in-clearing documents are typically all non-on-us documents received from other banks or clearing facilities. Generally, for these documents, the only processing activity required of the sorter is capturing the MICR data and sorting the documents into groups according to individual customer accounts.
FIG. 1 is a block diagram of a prior art check processing system having imaging capability. This system includes equipment (i.e., a balancing station 10 and other components) typically located in the "back room" of the bank, i.e., remote from the teller stations. FIG. 1 also depicts a conventional bank check 1 having the usual areas for: the printed name and address of the maker 2; a date 3; a check number 4, which may be printed with magnetic ink in a machine-readable format; a "pay to the order" line 5; a courtesy amount field 6, wherein the amount of the check is entered by the maker in arabic numerals; an amount line 7 on which the amount of the check is written or spelled with alphabetic characters; a line 8 for recording a memorandum to the maker; and a signature line 9 for recording the signature of the maker. In addition, a line of machine-readable MICR code characters is pre-printed on the check in magnetic ink. The MICR code characters include the bank and branch number, on-us characters, and maker's account number. In addition, the MICR characters may include the check number on the same line as the other MICR characters. A blank space is also provided for a later entry of machine-readable MICR characters representing the check amount.
As shown in FIG. 1, the balancing station 10 receives checks from branches and/or tellers in the processing bank. The balancing station ensures that the total of the check amounts for a series of checks for a particular depositor account match the total amount indicated in an associated depositor summary document. The checks are then passed to an amount encoder 12 that encodes on each check the amount of that check. The checks are then fed to a check sorter 14. The check sorter 14 provides transit read and amount-encoded checks to a balancing station 16. Transit checks that are not properly amount encoded are passed to a reject key entry station 18 at which the amount is properly encoded. From the reject key entry station 18, the transit checks are passed to the balancing station 16. From the balancing station 16, the transit checks are sent to other banks.
Similarly, on-us read and amount-encoded images (as opposed to the checks themselves) are passed to a balancing station 20, which performs the balancing process with the on-us check images. The on-us images of checks that were not properly amount encoded are provided to a reject key entry station 22. From there, the latter images are passed to the balancing station 20. From the balancing station 20, the on-us check images are sent to a mainframe computer 24, which prepares customer statements to be sent to the customers associated with the respective checks.
There is a legion of prior art patents relating generally to automatic document processing. In addition, much of the recent prior art relates to processing of images of documents. However, as indicated by the following summary of a few representative recently issued patents, the prior art generally discloses expensive "backroom" document processing systems, which, the present inventor believes, fail to adequately address the high cost of check processing.
For example, U.S. Pat. No. 5,204,811, Apr. 20, 1993, titled "Document Processor With Transport Buffer," discloses an image-based system for processing checks and deposit tickets. A deposit ticket and its corresponding checks are transported through a portion of the apparatus where data representing the monetary amounts displayed on the documents is entered into a computer. The checks are held in a buffer area, in a group, until all of the checks in the group corresponding to the deposit ticket have had their amounts entered. When the computer indicates that the total of the entered amounts equals the amount on the deposit ticket, the checks are individually withdrawn from the buffer and delivered to an inscriber which encodes monetary data on the checks. The disclosed system is purportedly superior to similar systems because the need to make corrections to inscribed checks is reduced by inscribing the checks only after balancing.
U.S. Pat. No. 5,187,750, Feb. 16, 1993, "Archival Document Image Processing And Printing System," discloses a highly sophisticated system for handling customer checking accounts. According to the patent, original checks/documents are processed into digital image data and then stored temporarily in magnetic media and transferred to optical long-term archival storage. The system retrieves monthly groups of digital images, and then sorts one-day's worth (i.e., 1/22 of a 22 business-day accumulation) by account number so that statements can be printed each day. Purportedly, massive amounts of data (e.g., for 500,000 to 1,000,000 customer accounts) can be accumulated and stored while the system operates to rapidly retrieve and print sufficient customer statements each day so that each customer will receive a personal monthly statement.
U.S. Pat. No. 5,097,517, Mar. 17, 1992, "Method And Apparatus For Processing Bank Checks, Drafts And Like Financial Documents," discloses a system for reading numeric information on bank checks and like documents. A system purportedly capable of reading unconstrained, constrained, printed, and typed numeric characters, and of locating the division between dollar and cents amounts, analyzes an electronic black and white image of the numeric information on a document. The system purportedly is also capable of reading overlapping touching and not touching characters.
As mentioned above, the prior art fails to adequately address the high cost of check processing. Accordingly, a primary goal of the present invention is to reduce check processing costs.